Kozmo.com makes its last delivery

Kozmo.com has joined the dotcom delivery slaughter by shutting its doors and laying off more than 1,000 staff.

Yesterday the CEO of the Silicon Alley Net outfit, which promised to deliver a range of items such as pizza, videos or medicine within one hour, blamed the company's death on Internet investor jitters and the outfit's founders.

"Given more time and more hospitable market conditions, Kozmo would have succeeded in rounding the corner and would have continued to grow," said Gerry Burdo. He also blamed "some decisions made early in the company's development."

Kozmo, started by a 26-year-old entrepreneur from his Manhattan apartment in 1998, said yesterday it would liquidate its assets and lay off all 1,100 staff with immediate effect. The company operated in nine cities and at one point had 3,300 employees.

But at its peak Kozmo was ploughing through $30 million per month, a situation that couldn't last amid the downward spiral of the dotcom market. Last summer it withdrew its IPO and started adding a delivery fee for certain orders. In January it was forced to close its businesses in Houston and San Diego with the loss of more than 100 jobs.

In December it claimed to be profitable in three cities - New York, Boston and San Francisco, and managed to secure $25 million in investment. But despite the company's cost-cutting exercises, this amount was not enough to see the outfit through to profitability.

In total the Net outfit, whose carrier bags were a commonly seen fashion accessory touted by modern urbanists in Manhattan, burnt through $250 million in investment - including $60 million from Amazon and $25 million from Starbucks.

Kozmo had witnessed the demise of many of its e-grocer delivery rivals. Last autumn Urbanfetch.com said it was ditching its consumer B2C business, while Massachusetts-based online grocery delivery service Streamline.com announced it would close in November. Earlier this year Webvan ditched expansion plans after losses doubled for the fourth quarter. ®